Consider hedge funds as a career option for lawyers

The salaries being paid by hedge funds are increasing from already high levels. This is the case not only for the investment pros who handle the money but also others who work at the funds.

In many cases, attorneys are among the professionals who make their way to hedge funds, working on compliance issues, regulation and other matters, or they may opt for a more direct role in handling investments.

Last year, total mean compensation for investment pros at hedge funds was about $950,000, according to Institutional Investor’s Alpha. Non-investment hedge fund employees earned an average of $575,000 in 2013.

Attorneys looking to leave general counsel offices or even law firms may find lucrative openings at the hedge funds.

Though they often want related experience for investment jobs, Yale Law School advises its students, “Most recent graduates interested in hedge funds are best-suited for the analyst role.” Analysts often become hedge fund managers, which has among the highest salaries in the sector. FINS advised that lawyers with firm experience and a financial background may have better chances to land a job at a hedge fund.

Even at law firms, attorneys have found hedge funds needing services. Seven years ago, a report from Upstart Business Journal said that lawyers were drafting contracts and registration statements, and some even gathered “legal intelligence so that hedge funds can make big-money investment decisions.”

Of course, many hedge fund employees and managers may find to their way to attorneys, after getting in trouble with the Securities and Exchange Commission (SEC) or similar government regulators. In fact, Nelson Obus, a hedge fund manager at Wynnefield Partners, who just won a civil case on insider trading allegations, spent more than $9 million on legal fees, according to The New York Times.

Also, because the SEC is reportedly “cracking down on compliance officers of hedge funds and other financial institutions of a certain size,” companies “are seeking to give compliance officers greater and more direct access to CEOs,” InsideCounselreported. As a result, hedge funds are beginning to heighten the status of the CCO (chief compliance officer.)

Still, there is a limit on how much hedge funds have to spend on in-house salaries or law firm fees. New hedge fund launches dropped to their lowest level in three years last year, according to data from Hedge Fund Research. The number of hedge fund launches totaled 1,060 for 2013, which is the lowest level since 935 funds launched in 2010, the report said. However, total hedge fund industry capital was at a record $2.62 trillion in 2013.